Trade Liberalization And Skill Premium

Economic globalization is an irresistible fundamental trend,requiring smooth flow of capital and goods,among which trade liberalization plays an important role in promoting integrated development of the global economy.Since its accession to the WTO,China's foreign trade volume has been growing continuously,and China has become the second largest economy in the world in 2010.The continuous process of trade liberalization promoted the cross-regional flow of factors and promoted economic growth,and then it also created some new problems,such as income inequality between industries and the expansion of skills premium.As we all know,the widening income gap may lead to economic turbulence,which is not conducive to the long-term stable economic growth.Based on the perspective of industry heterogeneity,this paper investigates the influence of trade liberalization on skill premium,and studies the relationship between the degree of trade liberalization measured by final commodity tariff and intermediate commodity tariff and the level of skill premium in manufacturing industry.This paper firstly reviews relevant literatures,and then calculates the tariff level of China's subdivided industries from 2002 to 2016 to measure the trade liberalization index and the level of skill premium.Then it constructs an empirical model to test the relationship between trade liberalization and skill premium.The empirical results show that trade liberalization has a positive promoting effect on skill premium,and trade liberalization of intermediate goods has a greater promoting effect on skill premium than trade liberalization of final goods.Then the empiricaltest was conducted again from the perspective of industry heterogeneity.The results showed that for labor-intensive and capital-intensive industries,trade liberalization increased the level of skill premium,while for technology-intensive industries,trade liberalization reduced the level of skill premium.In terms of robustness test,the empirical test of import permeability instead of tariff shows that the result is still robust.